Hogan, Pugh tour State Center, discuss alternative plans

Gov. Larry Hogan and Mayor Catherine Pugh toured the stalled State Center development in Baltimore Thursday afternoon, lamenting the lack of progress at the site as a legal battle between the state and the company that planned to develop it rages on. (Luke Broadwater / Baltimore Sun)

Gov. Larry Hogan and Mayor Catherine Pugh toured the stalled State Center development in Baltimore Thursday afternoon, lamenting the lack of progress at the site as a legal battle between the state and the company that planned to develop it rages on. (Luke Broadwater / Baltimore Sun)

Gov. Larry Hogan and Mayor Catherine Pugh toured the stalled State Center development in Baltimore Thursday afternoon, lamenting the lack of progress at the site as a legal battle between the state and the company that planned to develop it rages on.

The $1.5 billion redevelopment was supposed to provide a badly needed economic boost for the city’s west side. But it has dragged on for years without progress in part due to several lawsuits. The state Board of Public Works scuttled the most recent version of the project in December after more than a decade of planning, negotiations and litigation.

After Hogan toured the government complex Thursday, the Republican governor and the development team, Ekistics LLC, engaged in a war of words over who was to blame for the lack of progress.

Hogan blasted the developer and previous administrations for entering into a deal that, he said, amounted to a “crazy proposal that didn’t make any economic sense."

“The current deal cannot go through," the governor said. “It’s already been rejected and it’s illegal for us to proceed."

A spokeswoman for Ekistics said the company stands ready to build the project and the Hogan administration is wasting $900,000 in taxpayer funds on litigation.

For more than a decade, state officials have planned an overhaul of the government office buildings and adjacent properties that span 28 acres near Eutaw Street and Martin Luther King Jr. Boulevard. The planned offices, apartments, condo tower and grocery store near light rail, Metro and train services would create a strong option for people looking to move to Baltimore, proponents say.

Conceived in 2004, the redevelopment plan called for building new offices for 3,500 state employees as well as residences and retail space over 15 years.

The State Center deal guaranteed the developer long-term, above-market leases with state agencies to enable the builders to secure financing. The plan was for the state to lease land to the developer, but the tract and structures would be owned by the state in the long run.

But 15 business owners backed by attorney Peter G. Angelos sued the state and the developer in 2010, contending the deal was unlawful and did not follow Maryland’s competitive bidding requirements. Ultimately that lawsuit was thrown out, but it stalled the project for years.

Soon after the Board of Public Works voted to cancel the leases in December, the Hogan administration launched a pre-emptive legal strike, suing lead developer Ekistics before the company could sue the state for breach of contract. The developer then filed a countersuit alleging the voiding of its agreement with the state was politically motivated.

“We’ve got a court case that’s been holding us up,” Hogan said. “The folks that were involved with this before that have been delaying for a decade or so are in the way. … There were capital leases in there that were illegal for us to sign.”

Caroline Moore, president of Ekistics, has called the lawsuits “a lose, lose, proposition."

Michael Edney, a lawyer for the developer, said the Angelos lawsuit slowed progress on the project, but the Hogan administration has blocked it since taking office.

“We just want to build this thing,” he said. “We have invested tens of millions into this project. It’s really been a mystery to us why he doesn’t want to move forward.

“My clients are very eager to meet with him and make any changes he wants. It makes me think this is an administration that doesn’t want resources in that community and is looking for an excuse for not doing so.”

Hogan said Thursday he and Pugh were working together to come up with an alternative plan.

“The two of us are very anxious to see the redevelopment of State Center,” the governor said. “We’ve been pushing as hard as we can since Day One of our administration. The mayor and I both agree we need to redevelop the site. We’ve been working together to come up with a really good plan.”

Pugh, a Democrat, said she was committed to advocating for the redevelopment and for keeping the government complex's jobs in Baltimore.

“We want to make sure the employees remain in Baltimore,” she said. “The community has been waiting a long time. We need to make sure the development moves forward.”

Hogan agreed.

“We’re committed to keeping all the jobs here in Baltimore City,” he said.

The State Center project was conceived under the administration of Gov. Robert L. Ehrlich Jr., a Republican, and was carried forward under Gov. Martin O'Malley, a Democrat.

State Del. Bilal Ali, a Democrat who represents the west Baltimore, said Thursday he didn't much care who develops the site. He simply wants it to get done.

“I do support the State Center project that’s in place,” he said. “The goal is to bring a development to the heart of the West Baltimore, which is a game changer. This area has been neglected for years."